Does 10% Reduced Pay = 10% More Time?

The Chicago Sun Times had an interesting article today by Sandra Guy on companies opting to reduce employee pay rather than conduct layoffs. The article poses the question, is it a better business strategy to retain employees but reduce pay? I can relate to the guy they interviewed, Dustin Hinton, who took a 10% pay cut to keep his job. He would rather work for less if it means retaining his job and being able to provide for his family. Who wouldn't feel the same? What the article doesn't mention, however, is whether Hinton has also received 10% of his time back.

Earlier this year I negotiated a four day work week with my boss, and took a 20% pay cut. Once the deal was made, I fretted over my decision. How does one advocate for a 20% pay cut? What was I thinking?! Three months later, I can safely say that my time is worth that and more for the activities it allows me to do--write, clean, do errands, organize the house...not to mention spend more time with my daughter. As a result, my family can actually relax on the weekend (no laundry, cleaning, or grocery shopping to do...)

My sense is that a reduction in pay accompanied by a reduction in hours would be a wonderful strategy for businesses. It would help them to retain valuable company knowledge (which is lost in a layoff), while also giving employees a break (which could increase morale). What worries me, however, is that companies will reduce pay without reducing hours, reduce 401k benefits and health care...and that, people will get used to living with less and expecting less from their employers.

That's why I'm advocating that if your company has approached you about taking a pay cut, ask them for extra time off in return. Assure them that this will not have a negative impact on your productivity at the office. (In fact, I think I'm more productive as a 4-day employee because there's no time to waste). Plus, if your reduced wages mean you need to take on more work (like Hinton and his wife) than you will want that extra 10% of your time to make up for your loss.